Home Ownership Unaffordable Despite 95% Mortgages

 The government’s scheme to turn generation rent into generation buy will not help single thirtysomethings get on the property ladder in much of England and Wales. The mortgage guarantee scheme will support banks and building societies to offer 95% loans, meaning that buyers only have to raise 5% themselves. Single buyers in their 30s on the UK median wage will still be locked out of buying a home in about half of local authority areas. Although two salaries will make it easier to raise a large mortgage, those on the UK median earnings for that age group will be unable to afford to buy a home in all of London and parts of the south and east. Read more on the Guardian website.

https://www.theguardian.com/uk-news/2021/apr/19/home-ownership-unaffordable-despite-95-mortgages-analysis-shows

Mortgage Scheme Launched For 5% Deposits

High Street lenders are now starting to offer mortgages to borrowers offering a deposit of just 5% under a new government guarantee scheme. The policy, announced in the Budget, is designed to help more first-time buyers secure a home. But the launch comes as average house prices in the UK continue to rise to record levels. Analysts also suggest that cheaper deals are available for those able to stretch to a 10% deposit. Read more on the BBC website.

https://www.bbc.co.uk/news/business-56777436

House Prices Were Flat In February

House prices remained flat in the UK in February, according to the latest official figures from the Land Registry. The lack of change left annual house price inflation up at 8.6%, following the surge in prices seen in the wake of the spring 2020 lockdown. The figures reflect activity prior to the chancellor’s announcement on 3 March of an extension to the current stamp duty holiday for homes under £500k in value, and of the introduction of a mortgage guarantee system to support 95% loan to value mortgages. Read more on the Housing Today website.

https://www.housingtoday.co.uk/news/house-prices-were-flat-in-february/5111485.article

House Prices Surge As High Demand Meets Record Shortage Of Homes For Sale

 A frenzy of activity has driven UK property prices to a record high this month, just as the government launches a mortgage guarantee scheme to help people with small deposits on to the housing ladder. Online property portal Rightmove said the average asking price jumped by 2.1% in April to a new all-time high of £327,797, an increase of £6,733 from March. The surge was driven by a shortage of houses on the market, at a time when the coronavirus pandemic is driving many families to search for more spacious properties away from the cities, following the shift to working from home. Read more on the Guardian website.

https://www.theguardian.com/business/2021/apr/19/uk-house-prices-surge-as-high-demand-meets-record-shortage-of-homes-for-sale

Over 250,000 Have Given Up On The Dream Of Homeownership

Over 250,000 non-homeowners appear to have given up on the dream of homeownership in the past year alone, according to the 2017 Homeowners Survey, an annual study into the concerns, views and issues affecting homeowners and aspiring homeowners. The study found that for the first time in five years, there has been a drop in the number of non-homeowners who aspire to own. In 2013, 65% of non-homeowners aspired to homeownership, with this number increasing every year and peaking at 73% in 2016. But this year, the numbers have fallen for the first time, back to 71%. The stats mirror the rise of the government’s flagship Help to Buy programme which is now receding with the cancellation of the mortgage guarantee part of the scheme in 2016. Read more on the Homeowners Alliance website.

Help to Buy Scheme – Parliamentary Written Answer

Lord Cooper of Windrush: To ask Her Majesty’s Government what has been the total cost of the Help to Buy mortgage guarantee scheme since its introduction. 

To ask Her Majesty’s Government how many (1) individuals, and (2) families, have bought homes through the Help to Buy mortgage guarantee scheme.

Baroness Neville-Rolfe: The total cost of running the Help to Buy mortgage guarantee scheme from its introduction in 13 October to 31 March 2016 was £11.9 million. This has been paid in full with the commercial fees collected from lenders. The Treasury routinely publishes Official Statistics on the performance of the Help to Buy: mortgage guarantee scheme. The most recent publication was on 30 March 2017. This showed 101,960 mortgages had been completed with the support of the scheme. We do not record whether mortgage applications submitted to the scheme are made by a single individual or jointly.

Help To Buy Helps Over 220,000 People Buy A New Home

The latest Help to Buy statistics show that over 220,000 people have been able to buy a home using the government’s Help to Buy products. The schemes are a central to the government delivering on its commitment to help people into home ownership. People have benefitted from the following Help to Buy schemes: ISA, Shared Ownership, Mortgage Guarantee, Equity Loan and London Help to Buy.The statistics show that:

·         over 220,000 completions have taken place under the schemes

·         over 180,000 first time buyer households are now on the housing ladder after using a Help to Buy Scheme

·         the average house price across the schemes is £191,000, showing that it is those buying smaller properties who are really benefitting

Read more on the Gov UK website.

Social Housing Is Vital For London’s Future

The current patchwork of eight Government housing schemes are helping more get on the housing ladder, new research suggests. But there are very different levels of ‘generosity’ in the programmes with the Right to Buy and Starter Home schemes offering more than others, according to the research commissioned by the Council of Mortgage Lenders. One of them, the Help to Buy Mortgage Guarantee scheme ends in in December, and the seven remaining schemes all also specifically promote and deliver new housing supply, which the CML report says is clearly helpful in addressing this most pressing structural housing market problem.  The report analyses how each of these schemes works for different types of households. Read more on the Property Wire website.

Valuations Rise As Help To Buy Mortgage Guarantee End Looms

First time buyers in the UK are racing to beat the end of year deadline for the Government’s Help to Buy mortgage guarantee scheme, before it closes at the end of December, with more valuations being carried out. In September the number of valuations for first time buyers rose by 18.7% on an annual basis. Data also show that remortgaging valuation activity rose 14.7% year on year and despite huge turmoil in the buy to let market over the last 12 months, there has been such a large increase in activity in this segment of the market over the last two months that valuations are 0.4% up on last year. Read more on Property Wire.

Over 150,000 Have Bought Homes Through Help To Buy Says Government

Over 150,000 people have bought homes under the Help to Buy scheme according to the latest figures released by the Government. First-time buyers accounted for 80% of those taking advantage of the scheme with 95% of Help to Buy completions taking place outside of London. The highest number of homes bought through the mortgage guarantee scheme have been in the North West region. Over half of the completions were for new-build homes with an average house price of £188,380. “While the stronger financial system means we expect banks to start to exit our Help to Buy Mortgage Guarantee scheme, the other Help to Buy schemes go from strength to strength,” said Chancellor of the Exchequer George Osborne. Read more on the Housing Excellence website.

Hundreds Of £100,000-A-Year Families Get Help To Buy Loans

The Government's flagship 'Help to Buy' scheme was set up to provide cheap mortgage guarantees to help families struggling to scrape together the money for a deposit for their first home. But new figures reveal the scheme is giving more help to families earning over £80,000 than it is to those getting by on less than £20,000 a year. Some 1,793 families with incomes of more than £100,000 a year have qualified for assistance under the Help to Buy scheme. A further 2,448 families on more than £80,000 a year have received assistance. By contrast, the scheme has helped just 2,466 families struggling on incomes of under £20,000 a year. Read more on the Daily Mail website.

Help To Buy: Helping 130,000 Own Their Own Home

Since the launch of the Help to Buy: Equity Loan and Mortgage Guarantee schemes:

·         80% of scheme completions have been made by first-time buyers, with more expected following the launch of the government’s Help to Buy: ISA scheme on 1 December

·         average house price was £186,000, significantly below the national average

·         over 130,000 housing completions through the Help to Buy scheme

·         94% of Help to Buy completions took place outside of London

·         almost half of Help to Buy completions have been for new-build homes

Read more on the CLG website.

Combine Shared Ownership and Help to Buy

The government should allow home buyers to use the Help to Buy scheme to make shared ownership purchases, the Chartered Institute of Housing (CIH) has said. In its submission to the government’s spending review, the Institute said the Help to Buy mortgage guarantee scheme should be used for low cost home ownership to help people on low incomes access the housing ladder. Currently, the Help to Buy mortgage guarantee scheme, which allows people to buy homes with 5% deposits, cannot be used to purchase shared ownership products. The CIH said the mortgage guarantee scheme should be extended beyond December 2016, but should be used solely to help buyers purchase low cost ownership homes, including shared ownership. Read more on the CIH website.

Help To Buy Scheme Hits Monthly Record

The number of homes sold under the government's Help to Buy scheme hit a record during the month of June, figures show. Some 4,745 new homes were sold under the equity loan part of the scheme, the highest total since it began in April 2013. Since then, a total of 112,803 mortgages have been arranged under Help to Buy. The majority of sales - 80% - have been made to first-time buyers.

The two parts of the scheme are running neck-and-neck, with 56,401 homes sold under the mortgage guarantee part. A similar number - 56,402 - have been sold under the equity loan scheme. Read more on the BBC website.

Help to Buy Scheme – Parliamentary Written Answer

Gloria De Piero: To ask the Secretary of State for Communities and Local Government, what estimate he has made of the average cost of properties sold to first-time buyers under the Help to Buy scheme in England.

Brandon Lewis: Information on the average cost of homes sold to first time buyers under Help to Buy is not currently published. However figures are available on the average cost of all homes sold under the Help to Buy: Mortgage Guarantee scheme for England (£163,921).Available figures for the Help to Buy: Equity Loan scheme show the average cost of all homes was £212,932 in England.

Help to Buy: Helping 100,000 Buy a New Home

Help to Buy, the government’s flagship housing scheme, has helped almost 100,000 people buy a new home since it was introduced. Since the launch of the Help to Buy equity loan and mortgage guarantee schemes:

·         80% of scheme completions have been made by first-time buyers, with more expected when the government’s Help to Buy ISA launches this autumn

·         the average house price was £184,000, significantly below the national average

·         almost 94,000 people have bought a home through the scheme

·         95% of Help to Buy completions took place outside of London

·         over half of Help to Buy completions have been for new-build homes

Read more on the CLG website.

Help to Buy Scheme – Parliamentary Written Answer

Emily Thornberry: To ask the Secretary of State for Communities and Local Government, what estimate he has made of the average cost of homes sold to first-time buyers under the Help to Buy scheme in (a) England, (b) London, (c) London Borough of Islington and (d) Islington South and Finsbury constituency in each of the last four years.

Brandon Lewis: Information on the average cost of homes sold to first time buyers under Help to Buy is not currently published. However available figures show the average cost of all homes sold under the Help to Buy: Mortgage Guarantee scheme as £163,921 for England and £287,109 for London. Available figures for the Help to Buy: Equity Loan scheme show the average cost of all homes was £212,932 for England.

Help to Buy 2 Makes It Cheaper To Buy Than To Rent

Paying back a Help to Buy mortgage is cheaper than renting, saving as much as £180 a year, according to Mortgage Advice Bureau (MAB). The average price of a property bought under the mortgage guarantee version of Help to Buy was £153,447 in March, the firm said. MAB claims that based on a 95% loan on the average Help to Buy 2 property price, the typical monthly mortgage repayment for a borrower in their first year would be £753 (or £9,036 annually). In comparison, the average rent across England and Wales now stands at £768 per month. This means that Help to Buy 2 applicants could save £180 annually by paying for a Help to Buy 2 mortgage instead of renting – as well as paying off debt on their own home rather than for a rented property. Read more on the Housing Excellence website.

Help to Buy Scheme Is Inflating House Prices

The damaging inflationary impact of the Government’s controversial Help to Buy scheme appears to have been confirmed, as the region where it has proved most popular has experienced the fastest-growing prices in the country.  Data published by the Treasury reveals that the mortgage guarantee scheme has been taken up most readily in the east of England. By December 2014 the scheme accounted for 8.2 per cent of all mortgage lending in the region. Meanwhile, Rightmove’s monthly analysis of regional house prices indicated this week that prices are now rising more rapidly in the east of England than anywhere else in the nation. Read more on the Independent website.

Help to Buy 2 Opens Homeownership to Those on Lower Incomes

The Government’s Help to Buy mortgage guarantee scheme (HTB2) is opening up the market to lower earners, compared to the mainstream housing market, according the brokerage firm Mortgage Advice Bureau (MAB). In the final three months of 2014, the average salary of people using the scheme dipped 11% from £31,270 to £27,957. By contrast, MAB said, the average salary of borrowers in the wider buying market increased “marginally” from £39,834 in September to £39,983 in December. This has meant that the average HTB2 homebuyer’s primary salary in December was £12,000 lower than the purchase market average. Read more on the Housing Excellence website.